The main compound in eucalytpus is eucalyptol also known as 1,8-cineole, which is a "cyclic ether and a monoterpenoid". Eucalyptus essential oil must contain at least 70% of this compound, although most contain more.
In this small study, prednisone dependent people with asthma were able to reduce their usage of steroids after ingesting capsules of 1,8-cineole. In this study, people with non-oozing sinus inflammation found that capsules containing 1,8-cineole found a reduction in "headache on bending, frontal headache, sensitivity of pressure points of trigeminal nerve, impairment of general condition, nasal obstruction, and rhinological secretion." (And as someone with sinus issues, I can assure you these are all awesome reductions!) And in this study, they confirmed it on rats.
In this paper on inflammation, it is posited that
Pathogenesis and symptoms of inflammatory processes are accompanied and/or initiated by the production of reactive oxygen species (ROS)...Eucalyptus oil ameliorate inflammatory processes by interacting with aggressive oxygen radicals of the OH.-type and interfere with leukocyte activation. These activities partially allow attenuation of oxidative attack and damage introduced by infections or environmental impacts.
in 2002 the EU has declared that it is safe in things like beverages and cough candy at up to quite high levels, although I don't know if you could get over the unsafe level because the horrible taste would stop you from being so foolhardy!
Eucalyptol can be used as an insect repellant - this study found that it didn't kill the larvae, but it did have an impact on the mosquitoes feeding and laying eggs on us! However, eucalyptus is very attractive to orchid bees, so you might have to get rid of those little creatures some other way! (Tea tree oil had the same effect...interesting!)
As for being an anti-septic, it looks like more study might be necessary (which is always a fancy way of saying "we're not sure yet!"). In this letter, we see a few studies cited that eucalyptus might be a local antiseptic, this case study shows it might be effective against MRSA, and this study shows that there is some promise but no conclusive evidence.
Interestingly enough, eucalyptus oil is showing that it can help other compounds penetrate our skin better, so it is being considered as a penetration enhancer (click here for study).
Does eucalyptus essential oil stand up to the claims? It looks like it does. We see studies confirming that it's good for respiration, we see studies confirming it helps with inflammation, and there's some indication it can be good for insect repellancy. (Click here and scroll to page 145 to see a summary of these studies.) I don't think we can call it antiseptic yet, but I do think we can call it a penetration enhancer
As for using it in cosmetic products, it is suggested that we use no more than 1.12% in our leave on products with a maximum of 4.5% when combined with menthol and camphor (Active Ingredients Used in Cosmetics). Add it to your cool down phase as you would any other essential or fragrance oil.
Why add it to our products? It's considered a thermoreceptor agonist - in other words, it makes our skin feel hot or cold even though there's been no change in temperature. Eucalyptus makes our skin feel a little colder. I add it to my foot cream for this reason, but we could add it our products to make someone with a cold feel a bit better. It can be used in a sports cream or Tiger Balm kind of product, as well. I also like it because it smells cold to me, and my best friend makes an awesome lime-eucalyptus blend that we've used in a body wash and a hand lotion.
A vital side note: Although combining eucalyptus with camphor and menthol can simulate Vicks, please do not make a bath bomb containing these ingredients for someone with a cold. Think about it for a moment...bath plus tingly essential oils equals super tingly bath. It isn't a good idea in a bubble bath either!
Join me tomorrow for fun formulating with eucalyptus!